Leading Role in Obama ’08, but Backstage in ’12

At first glance, the party that Penny Pritzker hosted last month in Chicago could have passed for an Obama reunion. Her modernist home and sculpture garden had been the site of Obama fund-raising events over the years, and the guests that night included presidential allies like Rahm Emanuel, chief of staff turned Chicago mayor, and Warren E. Buffett.

But the party was for a Goldman Sachs-sponsored small-business program, not the Obama campaign, and much of the political chatter focused on Mr. Emanuel. By night’s end, some guests wondered: had Barack Obama’s most important donor, the true believer whose support had helped power him to the United States Senate and the White House, moved on?

Ms. Pritzker’s commitment has become a matter of mystery and consternation among some Obama supporters struggling to recreate the success of the 2008 finance team that she led as chairwoman. Though she is assisting with the re-election campaign in a number of ways, Ms. Pritzker — whose family owns the Hyatt hotel chain and is active in charitable and Jewish causes — is less visible, has cut back on fund-raising and has told friends that she is intentionally doing less.

Some donors have taken that as a signal — or used it as an excuse — to scale back, according to those involved in fund-raising, even as the president’s fund-raising pace lags behind that of his Republican rival, Mitt Romney.

Ms. Pritzker is engaged in new business ventures, and fellow Obama donors say she could not be expected to repeat her tireless efforts from 2008. But interviews with dozens of donors, friends, and campaign and former White House officials show that virtually from the moment of Mr. Obama’s election, the golden relationship between the two became more complicated.

For Ms. Pritzker, her high-profile backing of Mr. Obama came at an unexpectedly bitter cost. Their relationship made her a punching bag for the labor movement, which targeted her for what union officials call exploitative practices toward housekeepers by the Hyatt hotels.

She had drawn business and Jewish leaders to support Mr. Obama, but when many of them turned hostile toward the president because of his policies, some directed their ire toward her, even though she had her own criticisms, too.

The anger amounted to a “triple assault” on Ms. Pritzker, said William M. Daley, who succeeded Mr. Emanuel as chief of staff. “She’s borne the brunt of a lot of the attacks,” he said.

“Often the big picture is not understood on where the president wants to go,” Ms. Pritzker said in a telephone interview. “That’s frustrating.”

For Mr. Obama, Ms. Pritzker’s wealth and business experience are huge assets but also potential liabilities. He considered nominating her for commerce secretary but did not, because her fortune risked making her radioactive. She does plan to join him on the campaign trail this month, but that could prove awkward, given that the president is pounding Mr. Romney for some of the same practices of which Ms. Pritzker or her family business is accused — housing significant wealth in offshore trusts and treating workers poorly.

Ms. Pritzker is still loyal but weary, those close to her say, and she has learned a tough lesson: it is extremely difficult for the president of the United States to be a good friend.

“There is a huge unresolved set of issues in the Democratic Party between people of wealth and people who work,” said Andy Stern, the former president of the Service Employees International Union. “Penny is a living example of that issue.”

Without Penny Pritzker, it is unlikely that Barack Obama ever would have been elected to the United States Senate or the presidency. When she first backed him during his 2004 Senate run, she was No. 152 on the Forbes list of the wealthiest Americans. He was a long-shot candidate who needed her support and imprimatur. Mr. Obama and Ms. Pritzker grew close, sometimes spending weekends with their families at her summer home.

Ms. Pritzker, 53, is an heiress who hates being called an heiress, friends say, a woman who wants to be known for more than her family’s fortune. She has earned law and business degrees at Stanford, steered her family’s hotel, real estate and financial businesses while starting new ones, participated in too many Chicago civic charities to name, and for fun, run triathlons (she sprained her ankle early in one Ironman race but still finished).

In 2008, she poured that energy and grit into putting Mr. Obama in the White House. Democrats often have rocky relationships with corporate interests, but Ms. Pritzker helped forge an unlikely bond between Mr. Obama, a former community organizer, and bankers, entrepreneurs and executives. For most of 2007, Mr. Obama trailed Hillary Rodham Clinton in polls, and yet his candidacy survived in large part because of the money collected by Ms. Pritzker and her team.

She wanted to be commerce secretary, friends say. But shortly after Election Day, while she was still raising money for Mr. Obama — more than $53 million for his inauguration, on top of the $745 million for the campaign — she withdrew from consideration. (She and campaign officials say it was her choice; others say the president-elect had no interest in a confirmation fight at a time of public anger over the advantages of wealth.)

A bank owned in part by her family had been so mired in toxic subprime loans that the Pritzkers and other owners eventually paid a $460 million settlement to the Federal Deposit Insurance Corporation. And her nearly $2 billion fortune exploits a network of trusts, including some held offshore, to minimize tax liabilities.

“Penny is realistic” and understood the political realities, said Laura D’Andrea Tyson, a former chief economist to President Bill Clinton.

Still eager to contribute, she traveled to Washington for even minor White House events and served on two economic advisory boards. Her most successful contribution was to foster partnerships between community colleges and businesses.

Photo

Penny Pritzker has cut back her involvement for this year’s Obama campaign.Credit
Daniel Acker/Bloomberg News

But some other projects she took on made her “frustrated beyond belief,” in the words of a friend.

“Penny experienced what most people experience when they come from the outside,” Mr. Daley said. “If it doesn’t originate in the bowels of the White House or somewhere else in government, there’s an aversion to it.”

To counter accusations that Mr. Obama was unfriendly to business, she quizzed White House officials for updates and statistics. “Penny masters the facts,” said Marty Nesbitt, a close Obama friend who started a business with Ms. Pritzker.

Even as she served as emissary, she expressed private frustration with what she called the White House’s lack of responsiveness and harsh tone about wealth and corporate greed, according to friends.

A Target for Labor

Ms. Pritzker never complained publicly, but she delivered the message to White House officials. She tries to give “the president or his advisers a perspective — what I’m hearing, what I’m seeing, how people are reacting — so that they can take that into consideration,” she said. In an e-mail, David Plouffe, a senior White House adviser, emphasized how much the president valued her counsel and friendship.

To fellow Obama allies back in Chicago, she would sometimes roll her eyes, saying she was trying to break through. “Well, I’ve tried,” she told them.

Ms. Pritzker would also have liked a connection with the president beyond economic policy and fund-raising, several friends said. Mr. Obama has invited only a handful of friends to Camp David, the presidential retreat in Maryland; when asked if she was among them, she said she had all the attention she needs.

“Personal time with a president of the United States could be a five-minute sidebar conversation,” Ms. Pritzker said. “The idea that we’re going to hang out — it’s certainly not my nature, nor is it his.”

As far back as 2007, Mr. Obama recognized that his relationship with Ms. Pritzker could be tricky; when he asked her to be his national finance chairwoman, he called labor leaders to alert them, they later said in interviews.

A standoff between labor and Hyatt hotels had been brewing for years over working conditions for housekeepers. By 2009, union officials decided to target Ms. Pritzker because of her ties to the president.

“We thought that a person who would spend so much time raising money for a person who cares about working people as much as Obama” would treat low-level workers better, said John Wilhelm, president of Unite Here, the union that has led the fight.

Henry Tamarin, president of Unite Here Local 1 in Chicago, helped create a devastating campaign against Ms. Pritzker, even though she was just one member of the family and organization. He hired an impersonator who walked the picket line handing out plastic coins and shouting “Get back to work! Penny needs her billions!” according to The Chicago Tribune.

In September, after Hyatt fired 100 housekeepers at nonunion hotels near Boston and replaced them with low-wage subcontractors, labor organizers flew a fired worker to confront Ms. Pritzker at a public appearance in Chicago. As she served on White House councils alongside Richard L. Trumka, the A.F.L.-C.I.O. president, his organization released a video that cast her as a villainess who hurt rather than helped the economy.

Hyatt defends its labor practices, saying that the average tenure of its housekeepers is 12 years and that Unite Here has refused to settle.

“I feel a personal connection with the employees at the hotel company,” Ms. Pritzker said in the interview. “The union attacks — it hurts. I don’t like it. It should be an issue between Hyatt and the unions, not become something personal to me.”

The architects of Ms. Pritzker’s troubles are not strangers to the president. Mr. Obama benefited from Mr. Tamarin’s early endorsement in the Senate and presidential campaigns and walked a picket line with him at a non-Hyatt hotel in 2007. Mr. Tamarin’s son Nate works at the White House as a liaison to labor. Even as the elder Mr. Tamarin was waging his campaign against Ms. Pritzker, he sat at the president’s table at a White House state dinner.

Labor leaders say the White House never asked them to ease up on Ms. Pritzker. Some of her Chicago friends complain that he could have encouraged a quiet resolution, but others say that any such intervention would have been inappropriate.

Now that Mr. Obama is in danger of being outspent by Mr. Romney and his allies, the pressure on Ms. Pritzker to increase her efforts is mounting. Some potential donors want to speak only to her, other fund-raisers say. She and a handful of others recently began recruiting high-ranking business executives to serve as Obama surrogates, writing opinion articles and speaking to the news media about the president.

Like many of Mr. Obama’s wealthiest donors, she has not given to the “super PAC” supporting him, saying she objects to the Supreme Court’s Citizens United decision, which paved the way for unlimited fund-raising by outside groups.

Many in the party now believe that Mr. Obama’s fate could turn on large checks from Ms. Pritzker and others like her to the outside groups. And even some of her friends believe she may yet find herself pulled into the money race at an entirely new level.

“Penny wants to win,” Mr. Nesbitt said.

Correction: July 22, 2012

An article last Sunday about Penny Pritzker, who managed fund-raising for the 2008 Obama campaign, gave an incomplete name for a union that has criticized her over the labor practices of the Hyatt hotel chain, which her family owns. It is Unite Here, not simply Unite.

Kitty Bennett contributed research.

A version of this article appears in print on July 15, 2012, on page A1 of the New York edition with the headline: Leading Role in Obama ’08, but Backstage in ’12. Order Reprints|Today's Paper|Subscribe